Free Response to Motion - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 01-cv-02199-MSK-MEH MICHAEL E. CLAWSON and JARED L. DILLON, Plaintiffs, vs. MOUNTAIN COAL COMPANY, L.L.C., ARCH WESTERN RESOURCES, L.L.C., and ARCH COAL, INC. Defendants.

DEFENDANTS' RESPONSE TO PLAINTIFFS' MOTION FOR DISCOVERY SANCTIONS

Defendants Mountain Coal Company, L.L.C., Arch Western Resources, L.L.C., and Arch Coal, Inc., by their attorneys, Holland & Hart LLP, hereby submit their Response to Plaintiffs' Motion for Fed. R. Civ. P. 37(c) Sanctions for Failure to Supplement Discovery Requests Regarding the Number of Defendants' Employees (Dkt. No. 449), filed March 7, 2007. For the reasons set forth below, Plaintiffs' Motion should be denied. I. INTRODUCTION Having failed in their attempt to exclude evidence from Sherrie Eastwood or derived from Defendants' Oracle personnel software system under Fed. R. Civ. P. 26(a)(1) -- an argument specifically rejected by the Court in its January 24, 2007 Order (Dkt. No. 447) at 28 n.18 -- Plaintiffs now seek to exclude this very same evidence under Fed. R. Civ. P. 37(c).

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However, a comprehensive review of the history of this issue reveals not only that Defendants adequately responded to the discovery requests propounded by Plaintiffs, but also that Plaintiffs have known about the flaws in the EEO-1 reports, the fact that Defendants did not intend to rely upon those reports to show the number of their employees, and the fact that a company representative and company records would be used to establish the proper figures for almost four years -- and, indeed, that Defendants repeatedly attempted to enter into a stipulation with Plaintiffs on this issue nearly two years ago, prior to trial in this case. II. FACTUAL BACKGROUND Defendants filed their Motion for Application of Statutory Damage Cap on June 5, 2006, following entry of the jury verdict. Dkt. No. 423. Attached to Defendants' motion was an affidavit by HR Administrator Sherrie Eastwood, setting forth the number of employees for each Defendant during the relevant years of 1998, 1999 and 2000 based on a review of the company's Oracle computer system. Id. at Tab 1. Plaintiffs objected to this evidence, complaining that neither Ms. Eastwood nor the Oracle system had been specifically disclosed by Defendants pursuant to Fed. R. Civ. P. 26(a)(1) and therefore insisting that the only admissible evidence on this issue was the EEO-1 reports. Dkt. No. 435 at 2-4. Defendants responded by noting that they had previously provided affidavits by two other HR representatives, which had warned that the Arch Coal EEO-1 reports were not accurate (because they included employees for other entities) and had provided the correct figures based on company records. Dkt. No. 441 at 2-7. In its January 24, 2007 Order, the Court set an evidentiary hearing on the issue of application of the statutory damage cap. Dkt. No. 447 at 2. The Court also specifically rejected Plaintiffs' argument for exclusion of Defendants' evidence on this issue: "[T]he Court denies

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any request to strike witnesses or permit additional discovery. The parties had ample opportunity to anticipate factual disputes over this issue prior to trial and to conduct appropriate discovery at that time." Id. at 28 n.18. Six weeks later, Plaintiffs filed the instant motion, contending that Defendants failed to adequately supplement their discovery responses on issues relating to the number of employees. Plaintiffs' recitation of the history of this issue is incomplete and misleading. A full review of the parties' pleadings and correspondence reveals the following: 1. Plaintiffs mailed their first set of Interrogatories and Requests for Production of

Documents to Defendant Mountain Coal Company, L.L.C. ("Mountain Coal") on April 18, 2002. Ex. A (Plaintiffs' First Set of Interrogatories to Defendant); Ex. B (Plaintiffs' First Set of Requests for Production of Documents to Defendant). At that time, Mountain Coal was the sole defendant in this case. The definitions set forth in the Interrogatories defined "You" as "Mountain Coal Company, its agents, employees, insurance companies and its agents and employees, attorneys, accountants, investigators, and anyone else acting on its behalf." Ex. A at 2. The Requests for Production did not include a set of definitions. Ex. B. 2. Mountain Coal served its responses to those discovery requests on May 21, 2002.

Ex. C (Defendant's Answers to Plaintiffs' First Set of Interrogatories); Ex. D (Defendant's Response to Plaintiffs' First Set of Requests for Production of Documents). For the three items at issue in this motion, the requests and responses were as follows: Interrogatory No. 37: Please identify the number of the defendant's employees in the United States and, specifically, identify the number of employees in Colorado, and at the specific Colorado locations. Answer: Defendant objects to Interrogatory No. 37 on the grounds that it is vague and ambiguous with respect to the term "specific Colorado locations." Notwithstanding these

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objections, and without prejudice thereto, Defendant states that, pursuant to Fed. R. Civ. P. 33(d), the answer to Interrogatory No. 37 may be ascertained by Plaintiffs from a review of Defendant's records and specifically refers Plaintiffs to the EEO-1 reports produced in response to Request for Production No. 12. Ex. C at 25. Request No. 12: Please produce a copy of each Employer Information Report EEO-1 form for the years 1997 to the present filed on behalf of the defendant's organization, and any subpart and attachments thereto. Answer: Defendant objects to Request No. 12 on the grounds that it is overly broad, and vague and ambiguous with respect to the term "defendant's organization." Notwithstanding this objection, and without prejudice thereto, Defendant will produce its EEO-1 reports for the years 1998 through 2001. Ex. D at 8. Request No. 29: Please produce any documentation evidencing the number of the defendant's employees in the United States and, specifically, the number of employees in Colorado, and at the specific Colorado locations in 1998, 1999, 2000, 2001, and 2002. Answer: Defendant objects to Request No. 29 on the grounds that it is overly broad, unduly burdensome, and vague and ambiguous with respect to the term "specific Colorado locations." Notwithstanding this objection, and without prejudice thereto, Defendant refers Plaintiffs to the EEO-1 reports produced in response to Request No 12. Id. at 14. Mountain Coal also responded to Interrogatory No. 18, which requested "the name, title, company location, address, and telephone number of the individual within the defendant's organization responsible for the filing of the defendant's Employer Information Report EEO-1 forms for the years 1997 through the present," by lodging an objection and then stating that "since 1998, Ed Langrand has been responsible for preparing the EEO-1 report. Mr. Langrand then forwards the report to the Human Resources department of Arch Coal, Inc., which is responsible for filing the report with the EEOC." Ex. C at 14. 3. On July 24, 2002, Mountain Coal served its amended responses to Plaintiffs'

discovery requests. No changes were made to the responses set forth above.

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4.

On August 27, 2002, Plaintiffs sent a letter pursuant to Fed. R. Civ. P. 37,

challenging several of Mountain Coal's discovery responses. Ex. E (letter dated 8/27/02). As to the items at issue, Plaintiffs stated as follows: Interrogatory No. 37: The defendant's answer is non-responsive as it refers the plaintiffs to documents purported [sic.] produced in response to Request for Production No. 12. No documents have been produced by the defendant in response to the plaintiffs' first set of discovery requests. Please immediately produce the documents the defendant states it has in its possession. The documents requested in this interrogatory are kept in the normal course of business. Request No. 12: Please produce the documents the defendant states it has in its possession, including for the year 1997. Request No. 29: No documents have been produced as erroneously stated by the defendant. Please produce the documents the defendant states it has in its possession, including for the year 1997. Ex. E at 6, 9, 10. 5. On September 25, 2002, Plaintiffs sent a letter to Mountain Coal, indicating that

the Stipulated Protective Order had been executed by the Court and, thus, that all documents responsive to Plaintiffs' discovery requests should be produced as soon as possible. Ex. F. 6. The following day, Mountain Coal sent a letter addressing Plaintiffs' various

discovery concerns and enclosing its second amended answers to its discovery responses. Ex. G (letter dated 9/26/02); Ex. H (Defendant's Second Amended Answers to Plaintiffs' First Set of Interrogatories); Ex. I (Defendant's Second Amended Response to Plaintiffs' First Set of Requests for Production of Documents). The letter indicated that the requested documents had been produced, except for the EEO-1 report for 1997, which was not available. Ex. G at 6, 9. The amended discovery responses did not alter the previous responses to Interrogatory No. 37 or Request No. 29. The Response to Request No. 12 was amended as follows:

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Answer to Request No. 12: Defendant objects to Request No. 12 on the grounds that it is overly broad, and vague and ambiguous with respect to the term "defendant's organization." Notwithstanding this objection, and without prejudice thereto, Defendant will produce its EEO-1 reports for the years 1998 through 2001. Defendant does not have a copy of its EEO-1 form for 1997 as such forms must be maintained only for the last two filing periods. Ex. I at 8 (changes in italics). Interrogatory No. 18, concerning persons responsible for preparing the EEO-1 reports was also amended to add, "At Arch Coal Inc., in 1998, Patricia Madras, Corporate Human Resources Manager, One CityPlace Drive, Suite 300, St. Louis, MO 63141 was responsible for filing the report with the EEOC. From 1999 to February 2002, Gary Crossland, same position and address, was responsible for filing. Betty Adkinsson, same position and address, will be responsible for EEO-1 reporting in 2002." Ex. H at 16-17. 7. By order dated December 2, 2002 -- six weeks after the October 15, 2002

discovery cutoff -- the Court granted Plaintiffs' Motion to Amend the Complaint to add Arch Coal, Inc. ("Arch Coal") and Arch Western Resources, L.L.C. ("AWR") as additional defendants. 8. Nearly four months later, on March 28, 2003, Plaintiffs sent a letter requesting

that Defendants produce EEO-1 forms for Arch Coal and AWR from 1997 to the present in response to Request for Production No. 12. Ex. J (letter dated 3/28/03). 9. Defendants responded by letter dated April 2, 2003. Ex. K. In that letter,

Defendants indicated that "Plaintiffs' Request for Production of Documents was propounded to Mountain Coal, who was the only defendant in the case at the time," and that "Plaintiffs never propounded any discovery request to Arch Coal or AWR, nor could they have done so, as these two entities were not added as defendants in the case until the Court's Order . . . allowing the filing of Plaintiffs' Sixth Amended Complaint, which came well after the discovery cutoff." Id.

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at 1. Nonetheless, Defendants indicated that "without prejudice to [their] position that they are under no obligation to `supplement' their response and provide such material," they would obtain and produce the requested documents. Id. Plaintiffs never responded to this letter. 10. On May 2, 2003, Defendants produced the EEO-1 reports for Arch Coal and

AWR, as well as a more recent EEO-1 report for Mountain Coal. Ex. L (letter dated 5/2/03). However, the letter sent with the EEO-1 reports warned: Please be advised that the numbers of employees reflected in these reports include employees not only of Arch Coal, Inc. and Arch Western Resources, L.L.C., but numbers of employees of other companies who are located in St. Louis, such as Ark Land and Arch Reclamation. EEO-1 reports are required to be filed on a location-by-location basis, not a company-by-company basis. Therefore, we have included an affidavit from Pat Madras, Manager of Corporate HRIS at Arch Coal, Inc., providing exact numbers of employees for Arch Coal, Inc., Arch Western Resources, L.L.C., and Mountain Coal Company, L.L.C. as of August 31, 2002, the effective date of the 2002 EEO-1's. Ex. L. The accompanying affidavit by Pat Madras offered the same warning concerning the inaccuracy of the EEO-1 reports. Ex. M, ¶ 3. The affidavit also set forth the number of persons employed by each Defendant as of August 31, 2002, based on "company records." Id. ¶ 2. 11. In their Third Supplemental Disclosure, dated September 2, 2003, and their

Witness List, attached to the Pretrial Order entered on September 8, 2003, Defendants disclosed Ms. Madras as a potential witness in this case concerning the EEO-1 reports and the number of employees of each of the three Defendants. Ex. N (Defendant's Third Supplemental Disclosure) at 6; Ex. O (Defendants' Witness List) at 4-5. 12. By letter dated September 16, 2003, Plaintiffs objected to the addition of several

witnesses, including Ms. Madras, to Defendants' disclosures. Ex. P (letter dated 9/16/03). 13. In response, Defendants sent a letter on October 7, 2003, enumerating various

times at which the contested witnesses had been mentioned during discovery. Ex. Q (letter dated

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10/7/03). As to Ms. Madras, Defendants noted that she had provided an affidavit in May 2003 relating to the production of the EEO-1 reports, but that Plaintiffs had "at no time thereafter . . . expressed any desire to depose Ms. Madras." Id. at 2. Defendants even offered to allow them to be deposed, notwithstanding that discovery had ended nearly a year earlier. Id. at 3. Plaintiffs did not respond to this letter. 14. On December 31, 2004, Defendants sent a letter to Plaintiffs with a supplement to

their discovery responses. Ex. R (letter dated 12/31/04). (Other supplemental discovery responses had been served in the meantime, but none related to the items at issue here.) The response to Request for Production No. 12 was amended as follows: Answer to Request No. 12: Defendants supplement their prior production with EEO-1 reports for 2003 and 2004. Ex. S (Defendants' Supplemental Responses to Plaintiffs' First Set of Requests for Production of Documents) at 1-2. At that time, Defendants provided the newer EEO-1 reports for Mountain Coal and indicated that they would soon be sending updated reports for the other Defendants. Id. 15. Defendants sent the updated EEO-1 reports for Arch Coal and AWR on January

5, 2005. Ex. T (letter dated 1/5/05). The letter accompanying the reports warned, "As with the prior EEO-1s provided for Arch Coal, Inc. and Arch Western Resources, LLC, the reports are done on a location basis and include employees of other entities." Id. 16. On February 8, 2005, Defendants supplemented their answer to Interrogatory No.

18, concerning the preparation of EEO-1 reports, by adding, "Betty Adkinsson, Corporate Human Resources Manager, Arch Coal, Inc., One CityPlace Drive, Suite 300, St. Louis, MO 63141, was responsible for EEO-1 reporting in 2003 and 2004." Ex. U (Defendants' Supplemental Answers to Plaintiffs' First Set of Interrogatories) at 3.

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17.

On March 1, 2005, Defendants sent Plaintiffs a supplemental affidavit by Betty

Adkisson, Manager of Corporate Human Resources for Arch Coal, to accompany the most recent EEO-1 reports. Ex. V (letter dated 3/1/05); Ex. W (Supplemental Affidavit of Betty Adkisson). The affidavit warned that "[t]he EEO-1 headquarters report filed by Arch Coal, Inc. does not reflect the number of employees on a company-by-company basis" and offered the correct number of employees for Arch Coal and AWR as of January 1, 2005, "[a]ccording to company records." Ex. W, ¶¶ 2-4. 18. Following the final trial preparation conference the day before, in a letter dated

June 16, 2005, Defendants proposed a stipulation concerning the number of employees for each of the three Defendants for 1998, 1999 and 2000, for purposes of applying the damages cap. Ex. X (letter dated 6/16/05); Ex. Y (proposed Stipulation (Number of Employees)). In the letter, Defendants stated that "Pat Madras, the Manager for HRIS for Arch Coal, Inc., would testify as to these matters, and as far as we are aware, Plaintiffs have no evidence to dispute such facts." Ex. X. Despite Defendants' repeated requests that Plaintiffs respond to this proposed stipulation, Ex. Z (letter dated 6/29/05); Ex. AA (letter dated 7/14/05) at 1; Ex. BB (letter dated 7/20/05); Ex. CC (letter dated 10/12/05) at 1, Plaintiffs never responded. III. ARGUMENT Plaintiffs' protest that they have been "ambushed" and that Defendants failed to respond to discovery requests and withheld information during discovery are disingenuous and not supported by the record. First, the discovery requests at issue were propounded to the only defendant in the case at the time -- Mountain Coal -- and not to the two other Defendants -- who were not added to the case until much later. Indeed, the Interrogatories at issue defined "You" as

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"Mountain Coal Company, its agents, employees, insurance companies and its agents and employees, attorneys, accountants, investigators, and anyone else acting on its behalf." Ex. A at 2. Moreover, when Arch Coal and AWR agreed to provide their EEO-1s, they made it clear that Plaintiffs' discovery requests were not addressed to them and, thus, that the documents were not being provided in conjunction with those requests. Ex. K at 1. Plaintiffs never responded to that letter. Nor did they ever serve discovery requests on Arch Coal or AWR or assert (other than vaguely in the March 28, 2003 letter initially requesting the EEO-1s) that Arch Coal and AWR were under an obligation to respond to discovery that was not addressed to them. And notably, even the March 28, 2003 letter did not ask for any supplementation as to the number of employees for Defendants. Moreover, Arch Coal and AWR made it abundantly clear when they produced their EEO1s that they were not relying on these documents as an accurate reflection of the number of employees at either entity. Along with the EEO-1 reports, Defendants offered the affidavit of Arch Coal Manager of Corporate HRIS Pat Madras, explaining the reasons why the EEO-1s were not accurate and providing the correct count of the number of persons employed by each Defendant based on "company records." Ex. M, ¶ 2. Defendants also warned in their letter accompanying these documents, "Please be advised that the numbers of employees reflected in these reports [for Arch Coal and AWR] include employees not only of Arch Coal, Inc. and Arch Western Resources, L.L.C., but numbers of employees of other companies who are located in St. Louis, such as Ark Land and Arch Reclamation." Ex. L. When Defendants provided supplemental EEO-1 reports, they again warned about the inaccuracy of these documents, Ex. T ("As with the prior EEO-1s provided for Arch Coal, Inc. and Arch Western Resources, LLC, the

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reports are done on a location basis and include employees of other entities."), and again provided an affidavit by an HR official (Arch Coal Manager of Corporate Human Resources Betty Adkisson) with the correct information based on company records. Ex. W. Despite being provided with this information as far back as May 2, 2003, when the EEO1 reports and the accompanying disclaimer and affidavit were provided, Plaintiffs never asked to depose Ms. Madras, Ms. Adkisson, or any other HR official on this matter; never requested any information about the company records supporting the affidavits; and never sought any other discovery concerning the number of Defendants' employees. Having failed to diligently pursue the issue despite Defendants' repeated disclosure of their intentions -- and having failed to provide any response to Defendants' repeated requests to reach a stipulation on this issue prior to trial -- Plaintiffs cannot now claim that they were somehow "surprised" or "misled" by the fact that Defendants do not intend to rely on the EEO-1s, but, rather, present testimony by Pat Madras based on company records (i.e., the Oracle software system) as to the accurate number of employees employed by Defendants during the relevant time frame, 1998 ­ 2000. IV. CONCLUSION THEREFORE, for the foregoing reasons, Defendants respectfully submit that Plaintiffs' Motion for Sanctions should be denied. Further, as Plaintiffs' Motion for Sanctions seeks to reargue an issue already presented to, and rejected by, by the Court in its January 24, 2007 Order, and is otherwise groundless and wholly without merit, Defendants request that they be awarded their attorneys' fees and costs in having to respond to Plaintiffs' Motion.

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Dated: March 26, 2007.

Respectfully submitted,

s/ Jeffrey T. Johnson Jeffrey T. Johnson Christina Gomez HOLLAND & HART LLP 555 Seventeenth Street, Suite 3200 Post Office Box 8749 Denver, Colorado 80201-8749 Phone: (303) 295-8019 Fax: (303) 713-6202 [email protected] [email protected].

ATTORNEYS FOR DEFENDANTS .

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CERTIFICATE OF SERVICE
I hereby certify that on March 26, 2007, I have caused to be electronically filed the foregoing with the Clerk of Court using CM/ECF system which will send notification of such filing to the following e-mail addresses: [email protected] [email protected] I am not aware of any non CM/ECF participants in this matter requiring service by other means.

s/ Jeffrey T. Johnson Jeffrey T. Johnson HOLLAND & HART LLP 555 Seventeenth Street, Suite 3200 Post Office Box 8749 Denver, Colorado 80201-8749 Phone: (303) 295-8019 Fax: (303) 713-6202 [email protected] ATTORNEYS FOR DEFENDANTS

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